Goodrich shares slump after company says to explore sale of shale asset

NEW YORK (MarketWatch) -- Goodrich Petroleum Corp. shares
GDP, -2.77%
slumped 3.4% in premarket trade Wednesday, after the company said it's exploring strategic options for all or part of its Eagle Ford Shale asset in the first half of 2015. The company said it has a preliminary capex budget for 2015 of $150 million to $200 million, which may be increased if oil prices improve and it is able to monetize the shale asset. The company's 2014 capex budget was $375 million, according to a February statement. Goodrich said about 95% of the 2015 budget will be invested in the Tuscaloosa Marine Shale, where costs are coming down and results are improving. Oil production volumes are expected to average 5,100 to 6,700 barrels per day in 2015, a 30% to 42% rise over 2014. Natural gas volumes are expected to fall by 15% to 20% due to the sale of the East Texas Cotton Valley Field, which is due to close on Dec. 22. The company said it has 52% to 55% of its estimated oil volumes for 2015 hedged at $96.11 per barrel. "Assuming $65.00 per barrel for the remainder of the projected volumes, the estimated 2015 blended average oil price, prior to any basis or transportation costs, would be approximately $81.00 --$83.00 per barrel," it said. Shares have fallen 76% in the year so far, while the S&P 500 has gained 12%.

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